America's Great Economic Waterfall Is Drying Up

The era where the US underwrote global trade and innovation may be ending, but the chaos could throw up opportunities for others.

- Lin Suling

One of Europe's most valuable companies today is Novo Nordisk, the Danish pharmaceutical giant best known for Ozempic, a diabetes drug that also drives weight loss and is an object of near-frenzy in the United States. Since US approval in 2017, demand for Ozempic has exploded, especially after regulators broadened its use to include reducing the risk of heart attack and stroke. Novo Nordisk followed up with Wegovy, a higher-dose version aimed at obesity, which also won US approval. The result: the US now accounts for 60 per cent of Novo Nordisk's global revenues—a figure likely to grow as Americans embrace medicalized weight loss.

A wave of competitors from the same family of drugs—GLP-1—followed, including Rybelsus, Victoza, Trulicity and Mounjaro. Despite existing patents, US regulators allowed cheaper alternatives during supply shortages—an extraordinary move in a country that protects intellectual property.

Ozempic and Wegovy have been approved across Japan, Australia, Canada, the European Union and Singapore, aiding in chronic disease management in countries with ageing populations. The World Health Organisation (WHO) is now considering backing Wegovy to fight obesity. The benefits go well beyond blood sugar and diabetes control: recent studies link GLP-1 drugs to lower risks of dementia, cancer, kidney disease and even alcohol addiction.

THE U.S. ECONOMIC WATERFALL IN PHARMACEUTICALS

The astounding rise of life-enhancing drugs like Ozempic and Wegovy is part of a bigger story: For much of the post-World War II era, the US functioned as the headwaters of a powerful "economic waterfall"—one that fed the rest of the world with capital, technology and ideas.